EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606806
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Basell Australia Pty Ltd applied for a TCO in respect of certain catalysts on 15 May 2006.
Instrument
TCO No 0606806 was made on 28 July 2006. It declares that those certain catalysts are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0606806 is taken to have come into force on 15 May 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0606806, made under the Customs Act 1901, was enacted in 2006 to address the need for a streamlined process in applying for tariff concessions for specific goods, ensuring that the Australian market is not adversely affected by the introduction of such concessions. The instrument facilitates the application for a Tariff Concession Order (TCO) by granting a lower rate of customs duty on goods specified in the order, provided that no substitutable goods are produced in Australia. The enacting body, the Chief Executive Officer of Customs, must ensure that the application meets core criteria before making a decision. This legislative measure aims to promote efficient trade practices and support Australian businesses by reducing the duty on imported goods, thereby making them more competitive in the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0606806 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been sought and granted by the Chief Executive Officer of Customs (CEO). In this instance, the instrument relates to certain catalysts for which Basell Australia Pty Ltd applied and received a concession on 28 July 2006, effective from 15 May 2006. The Act applies to any person who applies for a TCO for goods that are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. This includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The instrument’s jurisdictional reach is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration of the TCO. The instrument extends its application through the Customs Tariff Act 1995, which specifies the duty rates for goods subject to a TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0606806 provide for the creation of a Tariff Concession Order (TCO) under section 269C of the Customs Act 1901. A TCO can be applied for by any person, as outlined in section 269F, and the Chief Executive Officer of Customs (CEO) must decide whether the application meets the core criteria specified in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, the CEO must then make a written order declaring that the goods in question are subject to a specified rate of duty. In this case, the TCO No. 0606806, which came into force on 15 May 2006, declares that certain catalysts are subject to a 0% rate of duty, as opposed to the general rate of 5%.
The Act imposes specific obligations on the parties involved. The CEO must ensure that the application for a TCO does not pertain to goods listed in section 269SJ, which are ineligible for a TCO. Furthermore, the CEO is mandated to publish a notice in the Gazette, as per subsection 269K(1), inviting any interested party to submit objections to the proposed TCO. Additionally, the CEO must consider any submissions received and make a decision based on whether the core criteria, as outlined in section 269C, are met.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of the Act may result in civil or criminal actions. The potential penalties for such breaches could include fines and imprisonment, depending on the severity of the violation. It is important for all parties involved to adhere to the statutory requirements to avoid any legal repercussions.